Economy

Highlights From Obama Economic Adviser Gene Sperling's Reddit AMA

Gene Sperling, Director of the National Economic Council, left, and moderator David Gregory, right, appear on 'Meet the Press' in Washington D.C.

Online community Reddit, which bills itself as “the front page of the Internet,” has around 50 million active users each month, making it one of the most highly trafficked communities on the Web. For marketers, activists, celebrities, and—more recently—politicians, Reddit’s “Ask Me Anything” (AMA) format makes it a valuable hub to engage with a younger, Internet savvy audience.

Reddit AMAs gained notoriety last year when President Obama answered a handful of questions, ranging from queries about space program funding to the White House beer recipe. Most impressively, the president spoke to redditors in their own, meme-filled language and ended up driving around 30,000 people to register to vote from the link he inserted at the end of his session. Today, Gene Sperling, director of the National Economic Council and Assistant to President Obama for Economic Policy, took a turn at answering some of the Internet’s most burning economic questions. After a short delay and a slow start, Sperling adjusted to the rapid, short response style of AMAs and even made some West Wing jokes. Below, some of the highlights:

Gravy-Leg__: In your opinion, what is the largest factor hampering the economy right now?

GeneSperling: One of the biggest factors holding us back is the refusal of Republicans in Congress to meet the President halfway on a plan to replace the sequester with a comprehensive, balanced plan to bring down our deficits in a way that still promotes demand in the short-term to give our recovery more momentum.

Take just one data point—the independent Congressional Budget Office estimates that leaving the sequester in place will reduce GDP growth by 0.6% this year, and cost 750,000 jobs. That is an unnecessary hit on our economy at just the wrong time. Of course, we can survive this hit if the Republicans refuse to compromise at all, but as the President said, it is just “dumb,” when you think about how much we should be working together to accelerate growth and job creation in our nation right now. [full text here]

Echoey: Today, you refered to Chained CPI as “Correcting the CPI.” Is there any difference? And can you explain your position on thie [sic] further?

GeneSperling: The cost of living question relates to how the government measures inflation. Today, we use a measure of inflation called the “CPI” or consumer price index. An alternative would be to switch to what is known as the superlative or “chained” CPI. The President would prefer to have this adjustment in the context of a larger Social Security reform, but he has said to Speaker Boehner that if it is part of a larger agreement that would include tax reform that would raise revenue by cutting loopholes and expenditures from the most well off, that he would be willing to agree to it because in divided government, if we’re going to make progress, we have to be willing to compromise.

One important note: any agreement to make this change to the CPI must include a dedication of a portion of the savings to protections for low-income Americans, certain veterans, and older Social Security beneficiaries. Our current offer, which reduces the deficit by $230 billion over the next 10 years, includes those protections. [full text here]

trifecta: HSBC is a symptom of being too big to jail. How can a free market economy exist when big actors cheat, break laws, and only get fined? They just consider this a business expense. Should we break up the banks?

GeneSperling: In terms of punishing wrongdoing, I think we have a strong record. The president directed his [Department of Justice] to create a financial fraud enforcement tax force. Over the last few years, the justice department has filed 10,000 financial fraud causes against nearly 15,000 defendants—including more than 2,900 mortgage fraud defendants. These cases have resulted in guilty pleas and jail time. And we got the largest housing settlement in history, forcing five of the largest banks to pay billions in relief for families across America. [full text here]

charliedouglas123: Having just finished The West Wing I’d like to say thank you for helping to create one of the best programmes I’ve ever seen! A couple of questions for you:
1) Just how realistic is the show compared to your day-to-day life working in The White House?
2) I personally think the NHS is one of the best things about the UK (my home country). Do you think that more should be done to bring a nationalised health service to the US, even at a cost that will increase the deficit again?

GeneSperling: On The West Wing—I always have answered that it is pretty realistic, except that we are not as funny, don’t walk as fast and most of us are not as good looking. The West Wing show aimed for reality, except that they often have to condense a 9-month process to 60 minutes. When President Obama asked me how life in the first six months of his administration during the financial crisis compared to normal times—I gave the same reply: that we were being forced to do 9 months of policy work in what seemed like 60 minutes. [full text here]